Guocoland’s deal to buy Pacific Mansion for S$980 million, the second-largest collective sale in Singapore’s history, will replenish the developer’s landbank and add to its value, CGS-CIMB said in a note on Monday.

“This transaction would enable Guocoland to replenish its dwindling Singapore residential sale pipeline,” the brokerage said. The deal also “underlines the developer’s confidence and optimism on the Singapore private residential market outlook. In addition, it would extend Guocoland’s residential development income visibility.”

The bid translates to a land price of S$1,806 per square foot of gross floor area, with a potential break-even cost around S$2,500 per square foot, the note said. At an average selling price of S$2,700psf, the project could add 4 Singapore cents to Guocoland’s current RNAV (revalued net asset value) of S$3.84, the brokerage said.